The independent Tax Review Committee (TRC) established by the Government of PNG recently completed a comprehensive review of the country’s tax system involving extensive and transparent stakeholder consultation over the course of two years. This culminated in two volumes of reports (inclusive of significant economic and tax reform recommendations) which were formally presented to the PNG Government in November, 2015.
The final report highlighted the high risks of PNG’s overdependence on the extractive sector and its vulnerability to the cyclical vagaries of global commodities pricing and recommended a ‘paradigm shift’ in the governance, management and stimulation of sustainable economic development. PNG’s vulnerability has become pronounced in recent months with the sudden drop in the oil price resulting in fiscal distress, lack of foreign exchange, and economic slowdown.
PNG is at a precarious crossroads and tax reform provides an opportunity for a strategic transformation. The report provides some realistic and practical policy, legal, institutional, and structural reforms to mitigate economic risk and vulnerability by diversifying the economic base to more sustainable sectors like agriculture, forestry, fisheries and tourism.
Sir Nagora Bogan, KBE, is Chancellor of the University of Technology, Chairman of the Papua New Guinea Tax panel of experts. He began his career with the PNG Taxation Office and during the 1980s and 1990s took a leading role in modernising tax administration in PNG. From 1991-1995, he was non-salaried Chairman of the London-based Commonwealth Association of Tax Administrators and from 1996 to 2002 Papua New Guinea’s Ambassador to the United States of America with concurrent accreditation as Ambassador to Mexico and High Commissioner to Canada. He served as Chairman of the Nambawan Super Fund Limited for more than a decade and is a director or board member of a number of PNG and regional corporations.
The seminar was presented as part of the Development Policy Centre’s PNG Project, which receives funding from the Australian Aid Program through the Pacific Governance and Leadership Precinct.